Payday super payments change next week

Australian businesses will soon be required to pay their employees' superannuation contributions at the same time as their wages, a change known as "Payday super," set to take effect from July 1, 2026. This reform mandates that superannuation payments, previously often made quarterly, must now align with regular salary payments.

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From a social justice point of view, I totally agree with the idea that people should be paid their entitlements on their pay day.

Business owner Casey O'Hare expressed mixed feelings about the upcoming changes. "From a social justice point of view, I totally agree with the idea that people should be paid their entitlements on their pay day," she said. However, she added, "Putting my business hat on, it is a little bit difficult because apart from processes, there's actually more cash going out the door every fortnight … we have to have that cash." O'Hare noted that her marketing agency, like many businesses, often operates on payment in arrears, meaning she is paid after services are rendered, which can create cash flow challenges when immediate super payments are required.

The primary goal of the Payday super reforms is to address the issue of unpaid or late super contributions, often referred to as wage theft. For employees like Jarod Graham, who missed out on nearly $10,000 in unpaid super from a previous job, these changes are a significant win. "When super is paid at the same time as wages, workers can immediately see whether their employer is meeting their obligations," Graham stated. "It improves transparency and accountability, and it reduces the risk of unpaid super going unnoticed for long periods of time."

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Putting my business hat on, it is a little bit difficult because apart from processes, there's actually more cash going out the door every fortnight … we have to have that cash.

Despite the benefits for employees, a significant portion of small businesses anticipate challenges. A survey by accounting platform Xero found that 87 percent of businesses believe Payday super will strain their cash flow, with over half citing difficulties with customer payments as the main concern. Angad Soin, also quoted in the article, indicated that many small businesses fear they may need to rely on personal savings to manage the new payment obligations. The Australian Taxation Office (ATO) estimates that approximately $6.2 billion in superannuation goes unpaid annually, highlighting the scale of the problem the reforms aim to solve.

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When super is paid at the same time as wages, workers can immediately see whether their employer is meeting their obligations. It improves transparency and accountability, and it reduces the risk of unpaid super going unnoticed for long periods of time.